Do you loathe the Internal Revenue Service (IRS) and Small Business Administration (SBA)? Why? Lately, both are doing everything possible to undo what Congress is doing to provide financial assistance and relief related to the coronavirus pandemic (COVID-19). Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions and clarify information about the CARES Act. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics:

Updates on Tax Impact of CARES Act:

Paycheck Protection Program (PPP)

Economic Injury Disaster Loan (EIDL)

Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act

My wife is 60. In 2019, she had $13,200 of Social Security income and $0 in income earned from work. Can she contribute to her health savings account (HSA) for 2019? High-deductible health plan is required to make contributions to HSA

What’s the best way to set up a real estate LLC, if you’re an investor that does both buy and hold, and fix and flips? Split them; put buy and holds into LLC or partnership, and fix and flips into S- or C-Corp

If I pull equity from a house, does the money need to go back into the house or can I use it on another property or for other things? You can use it for whatever you want, but deduct interest on Schedule A

Can we write off donations to our nonprofit, even though we still haven’t been approved for 501(c)(3) status? Yes, you have 27 months from the application date to get approval

Is it too late to apply for a PPP loan for a contract worker? No, but apply ASAP

Will there be a penalty (forgiveness/tax) for paying an employee more than the average 2019 salary calculated (PPP) because of overtime or pension plan payments? There’s no penalty to help with forgiveness amount, but can’t pre-pay anything

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